The PWC Report on The Nova Scotia Film Industry

by Paul Andrew Kimball

Screen Nova Scotia released the long-awaited independent study by PriceWaterhouseCoopers (PwC) yesterday on the economic impact that the Nova Scotia film industry had in Nova Scotia prior to the cuts to the film financing programs and Film and Creative Industries last April by the Liberal government of Stephen McNeil. The PwC Report is detailed, well-researched, methodologically sound, and comprehensive. What is shows, beyond any shadow of a doubt, is that the film industry as structured prior to the Liberal cuts was a net economic benefit to the Province of Nova Scotia on many levels.

You would expect Stephen McNeil and the Liberals to take all of this seriously. 

You would be wrong.

Premier @StephenMcNeil hasn’t read @Screen_NS commissioned economic impact report. Won’t change anything. #nspoli pic.twitter.com/xtrKAW28Zw

— Jean Laroche (@larochecbc) April 14, 2016

So, to recap: he hasn’t read the report, and it won’t change anything? This sums up the complete failure of the Liberal government’s policy with respect to the film industry, and its fundamental dishonesty in dealing with the people of Nova Scotia on this issue. 

Fortunately, the report itself has plenty to say, and Nova Scotians need to hear it. Here are the highlights from the report that the Premier says he hasn’t read, and won’t make any difference:

The net cost of the funding provided by the Government of Nova Scotia (before the recent reduction in provincial incentives) and our calculations suggest that when considering the direct and indirect impacts, we estimate that tax revenues in Nova Scotia created by the FITC program are higher than the tax credits provided by the government.

As the Screen Industry in Nova Scotia has matured over the years, it has trained local individuals and attracted talent from elsewhere to create a cluster of skilled producers, cast and crew in the province. This is evidenced in the increasing share of local productions in Nova Scotia over the past few years. That said, Nova Scotia’s Screen Industry cluster is considerably smaller than other major centres of film and television production in Canada, such as Toronto and Vancouver. Given the advantages that Ontario and British Columbia have over Nova Scotia, such as larger Screen Industry clusters, one might expect that the Screen Industry in Nova Scotia would require proportionally higher provincial financing, but that does not appear to be the case. The ratio of tax credits to Screen Industry production spending in Nova Scotia has been generally in line with that of Ontario and British Columbia.

The Film and Television Production Industry (“Screen Industry”) is an integral and important component of the rapidly developing international creative economy. In Nova Scotia, the Screen Industry enjoys access to a cluster of skilled labour, access to the most educated young people in Canada and unique natural scenery, which has helped it grow and develop over the past two decades. It has become a significant part of the province’s “cultural industries” and an important contributor to the provincial creative economy.

In fiscal 2014, the Screen Industry had an economic footprint in Nova Scotia of $180 million in GDP; 3,200 employees; and $137 million in labour income2. This impact was achieved by a combination of work by local entrepreneurs and supported by, among other things, labour based tax credits from the provincial government. Nova Scotia local production – as a percentage of total production activity – has increased from 56% in 2010, to 88% in 2014.

Our research, as outlined in this report, shows that individuals employed by the Screen Industry in Nova Scotia can be generally characterized as more highly educated than the overall Nova Scotian labour force, and younger, on average, than the overall Nova Scotian labour force.

One of the main drivers for maintaining growth and prosperity in developed countries is a successful transition from an economy based primarily on the production of goods and services, to a creative economy with a greater focus on innovation. As recognized in the “Now or Never” report from the Nova Scotia Commission on Building Our New Economy, chaired by Ray Ivany (the “Ivany Report”) and by many others, cultural industries are one of the main pillars of a creative economy. The Screen Industry plays an important role in Nova Scotia’s cultural industry and hence the development of a creative economy.

This is the critical information that the Liberal government has withheld from Nova Scotians for over a year now: the film & television industry is a net economic benefit for the Province of Nova Scotia, it employs a more highly educated and younger workforce, it is primarily locally owned and operated, and the rate of the tax credit as it stood prior to the Liberal cuts was in line with Ontario and British Columbia, despite the fact that both of these provinces have significant competitive advantages over Nova Scotia in terms of industry resources.

In other words, everything the Liberals have told Nova Scotians about the film and television industry has been false, and remains false. There is no other way to look at it. Of course, this comes as no surprise to anyone who has taken the time to look into the facts, because the new PwC report mirrors previous economic impact studies of the industry in Nova Scotia, all of which – including reports authored by the government’s own film experts – came to the same conclusions. The government ignored those reports over the past year, just as they have made it clear that they will ignore the PwC report going forward.

And that is simply, and sadly, the shameful and incompetent state of governance in Nova Scotia today. Of course, when we have government MLAs like Liberal Terry Farrell (Cumberland North), who asked the following question of a bureaucrat at a Public Accounts Committee hearing on the film industry in December 2015, what can we expect:

I’m going to preface this by saying that I haven’t taken an economics course or a math course since Grade 11, and that wasn’t yesterday, so I’m going to get you to give me some schooling, if you will, on some fundamental economic terminology and principles. The gross domestic product of the province, my understanding is that is a kind of measure of our overall productivity as a province. What’s that comprised of?

The mind boggles.

Perhaps Mr. Farrell and his colleagues should read the PwC report. They might actually learn something.

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Paul Andrew Kimball

Paul Kimball is a filmmaker and author who lives in Halifax, NS. His work includes the book The Other Side of Truth, the feature films Exit Thread, Roundabout, and The Cuckoo in the Clock, as well as documentaries for CBC, Bravo, Vision, Space, TVNZ, Knowledge, Eastlink TV, UFO TV, and SCN. He has an honours degree in history from Acadia University, and a law degree from Dalhousie University. He is a former Program Administrator of the Nova Scotia Film Development Corporation, and served as President of the Nova Scotia Film and Television Producers Association and as a member of the Nova Scotia government's Film Advisory Committee. He has an abiding love for vanilla milkshakes, mysteries and Walden moments.

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